Health of Global Economy Seen as Greatest Threat to Business in 2005, Accenture Study Finds

Competition and Risk to Corporate Reputation Also Big Threats

NEW YORK; Jan. 24, 2005 – The health of the global economy is seen as the biggest threat to companies’ success in 2005, according to results of a global survey of senior executives released today by Accenture (NYSE: ACN).

The purpose of the study, drawn from interviews with nearly 900 senior executives at many of the world’s largest organizations, was to identify and prioritize the issues of greatest concern to senior management, understand how their priorities shift over time, and identify key forces behind those issues.

When asked to select from a list of 10 threats to their companies’ success in 2005, the greatest number of respondents—74 percent—selected “the health of the global economy.” “The competition” ranked second, selected by 72 percent of respondents, followed by “my company’s reputation” (64 percent), “inability to attract and retain the best talent” (53 percent) and “low employee morale” (50 percent).

However, there were noticeable differences between respondents in different countries. For instance:

While terrorism was seen as a major threat in the United States and Spain, selected by 53 percent and 50 percent of respondents in those countries respectively, only 44 percent of respondents overall viewed it as a major threat to their success.

In Japan, the “inability to develop new products and services” was seen as the greatest threat, selected by 91 percent of respondents there, compared with 63 percent globally and only 40 percent in the United States.

Concern over the global economy was highest in Italy (88 percent) and France (84 percent) and lowest in Germany (55 percent).

“This survey shows us that concerns about global economic health are still weighing on the minds of executives in 2005, but it is also clear that executives are sharply focused on addressing the fundamentals that drive high performance such as meeting the challenge of competition and attracting and retaining the best talent,” said Mark Foster, Group Chief Executive—Products, with responsibility for Accenture’s policy and corporate affairs. “Successfully meeting these challenges will help these companies’ weather difficult economic trends and be poised to excel as economic conditions improve.”

The following tables illustrate how the top business threats differ by management role and geography.

Management Role

CEO

CIO

CFO

The health of the global economy

74%

78%

74%

The competition

61%

66%

82%

My company’s reputation

62%

60%

66%

Inability to attract and retain the best talent

64%

65%

71%

Low employee morale

56%

55%

57%

Inability to develop new products and services

53%

53%

54%

Inability to focus on our core competencies

48%

44%

52%

Compliance with government regulations

53%

48%

48%

Instability of senior leadership

47%

45%

49%

Terrorism

41%

47%

42%

Other

9%

7%

8%

Geography

France

Germany

Italy

Japan

Spain

UK

US

Canada

The health of the global economy

84%

55%

88%

75%

74%

68%

72%

83%

The competition

69%

61%

65%

87%

77%

77%

73%

69%

My company’s reputation

73%

47%

79%

89%

81%

55%

50%

55%

Inability to attract and retain the best talent

75%

43%

61%

71%

73%

60%

62%

62%

Low employee morale

65%

45%

58%

77%

77%

48%

46%

48%

Inability to develop new products and services

68%

42%

57%

91%

69%

47%

40%

46%

Inability to focus on our core competencies

59%

37%

45%

77%

59%

39%

42%

51%

Compliance with government regulations

51%

44%

38%

48%

57%

56%

50%

38%

Instability of senior leadership

49%

32%

45%

84%

70%

37%

38%

46%

Terrorism

44%

32%

46%

41%

50%

41%

53%

35%

Other

12%

30%

7%

7%

9%

9%

1%

1%

About the StudyAs part of an annual study to identify senior executives’ top concerns, Accenture conducted a Web-based survey of 894 senior executives at many of the largest organizations around the world. Respondents represented all major industries and the public sector and included executives at the highest levels of senior management (“C-suite” executives) as well as heads of key functional areas, such as human resources. For this year’s study, fieldwork was conducted between September and December 2004.

About AccentureAccenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 100,000 people in 48 countries, the company generated net revenues of US$13.67 billion for the fiscal year ended Aug. 31, 2004. Its home page is www.accenture.com.

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